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Hey Guest. Check out your NeoGAF Wrapped 2025 results here!
Microsoft Gaming Revenue Q2: Gaming (-9%), Hardware (-32%), Content and Services (-5%); Operating expenses increased driven by impairment charges
DeepEnigma
Gold Member
PauloRoberto
Member
So even the numbers MS use to make a division looks better than it really is... are not working. Jesus H. Christ!
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
What do they mean Operating Income is down -3%? I thought MS didn't give out profit numbers for gaming.
bender
What time is it?
PropellerEar
Member
Just wait for next year!
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PauloRoberto
Member
Xbox is THIS close to be smaller than Linkedin... LINKEDIN, ladies and gnetleman, the actually target of everything related to AI slop texts!
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Can somebody tell me how Double Fine can withstand this beating Xbox is taking? I wish MS would just sell them off to somebody.
They don't. Only relative percentage increases/decreases.
Gamer_By_Proxy
About to beat off
How's the Nex Playground doing?
Topher
Identifies as young
Asked gemini about "impairment charges"
In this context, the company is explaining a significant jump in spending ($840 million) and attributing it to two very different types of costs: one is a strategic "bet" on the future, and the other is an accounting "fix" for the past.
Here is the breakdown of what is happening:
In this context, the company is explaining a significant jump in spending ($840 million) and attributing it to two very different types of costs: one is a strategic "bet" on the future, and the other is an accounting "fix" for the past.
Here is the breakdown of what is happening:
1. The Growth Engine: AI & Compute ($$$)
This is the "proactive" part of the spending. The company is signaling to investors that they are aggressively chasing the AI market.- Compute Capacity: They are buying or leasing massive amounts of processing power (GPUs/Servers) to train and run AI models.
- AI Talent: They are likely paying "top-of-market" salaries and bonuses to recruit and retain specialized engineers.
- Investor Takeaway: This is generally seen as "Good Spend" because it is intended to generate future revenue, even though it hurts margins today.
2. The Accounting Fix: Gaming Impairment
This is the "reactive" part of the spending. An impairment in the Gaming division means the company admitted that some of its gaming assets (likely a studio they bought or a specific franchise) are no longer worth what they thought.- What happened: They "wrote down" the value. For example, if they bought a gaming studio for $2 billion but now realize it's only worth $1.5 billion, they must record that $500 million difference as an expense.
- Investor Takeaway: This is "Non-Cash Spend." No money actually left the bank account this quarter, but it signals that a previous investment in Gaming isn't paying off as expected.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Ahhhh!!! Gotcha! So somebody will probably need to go back and look at all of the relative increases and decreases over the last 10+ years to see what their actual profit margin is. Geez.....
Ramiro_Rodriguez
Member
How does it comes that MS name the revenues of their cloud services only in combination with other services?
Aren't the cloud services the huge success they want their share holders to believe?
Maybe because Copilot (web) is still stuck at 1% market share?
And the Xbox is dead..
Aren't the cloud services the huge success they want their share holders to believe?
Maybe because Copilot (web) is still stuck at 1% market share?
And the Xbox is dead..
memoryman3
Member
So selling less Xbox consoles actually increases profit margin in 2026.
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It was kinda expected given how the latest COD performed, they can use creative financials and other tricks to hide Xbox hardware sales, Gamepass profitability and flatlined subscriptions but if COD fails they can't escape from bad numbers.
I think they're rooting for GTAVI to miss 2026 otherwise COD won't have the mindshare for two years in a row and after so much time out of the spotlight casuals might just not come back in the way it used to be anymore.
I think they're rooting for GTAVI to miss 2026 otherwise COD won't have the mindshare for two years in a row and after so much time out of the spotlight casuals might just not come back in the way it used to be anymore.
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Hyper_hyper
Member
Happy 25th Xbox anniversary!!
Can't imagine how Welfare is feeling now
Can't imagine how Welfare is feeling now
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Not selling hardware. Not selling games. Not getting new or retaining subscribers. And that's with one of the biggest gaming IP's launching in that quarter? Holy shit. Xbox is well and truly cooked.
That ABK acquisition sure is working out spectacularly, isn't it Phil?
Keep in mind that MS raised the price of Gamepass in this reported quarter too. They did it on October 1st, so a full quarter's worth of time to see how that'll play out. And revenue is still down compared to last year.
SlimySnake
Flashless at the Golden Globes
lol so they ported everything to PS5, saw a 30% decline in hardware, and still managed to sell fewer games. Had Phil done nothing, they wouldve probably posted better numbers.
What a joke Phil Spencer has become. Every decision he's made has blown up in his face. A true jackass. One of the worst executives of all time, if not the worst. Literally ran Xbox to the ground.
What a joke Phil Spencer has become. Every decision he's made has blown up in his face. A true jackass. One of the worst executives of all time, if not the worst. Literally ran Xbox to the ground.
bender
What time is it?
DeepEnigma
Gold Member
Topher
Identifies as young
Rubbing salt in the wound by not using Copilot?
No, I wanted accurate information.
but also, yes
Magic Carpet
Gold Member
I don't think Doublefine would still be around if it wasn't for MS unfortuantly. If MS want to get rid of Doublefine, it's back to kickstarter
Ramiro_Rodriguez
Member
Imagine how bad the numbers would be without ABK.That ABK acquisition sure is working out spectacularly, isn't it Phil?
I don't mean the revenue alone, but also the negative effect on the Game Pass, without Day 1 releases of CoD.
Astray
Member
Microsoft needs to start promoting its stuff in actual gaming and platform-focused shows, their own marketing is just not viewed enough.
They also need to start inking deals with Sony and Nintendo for timed exclusivity of DLC or even entire games.
A big part of why EA ate their lunch this year is they took over Sony's deal with COD and switched it over to BF6. Ending that deal was a spectacular failure on that retard Spencer's part (he even went up on stage and tried to cast shade on dealings that made COD big to the point where he wanted to take it over).
Right now Microsoft Gaming is composed of a limping, almost dead platform business and a 3P publishing play that's working with one hand behind its back. Either that changes or the firings will continue until morale improves.
They also need to start inking deals with Sony and Nintendo for timed exclusivity of DLC or even entire games.
A big part of why EA ate their lunch this year is they took over Sony's deal with COD and switched it over to BF6. Ending that deal was a spectacular failure on that retard Spencer's part (he even went up on stage and tried to cast shade on dealings that made COD big to the point where he wanted to take it over).
Right now Microsoft Gaming is composed of a limping, almost dead platform business and a 3P publishing play that's working with one hand behind its back. Either that changes or the firings will continue until morale improves.
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Loomy
Thinks Microaggressions are Real
-9% Luck
-32% Skill
-5% Concentrated power of will
-8% pleasure
-2% pain
100% reason to remember Phil's career moment.
-32% Skill
-5% Concentrated power of will
-8% pleasure
-2% pain
100% reason to remember Phil's career moment.
Fuck, man. They're dead already lmao
demigod
Member
I give it less than a year and they will be shitcanned.
PauloRoberto
Member
Heavens, there is not even the 'it was during a quarter' justification in this case... we can almost assume that they lost more users than the price increase could cover...
Ashamam
Member
That is not specific to gaming by the looks of it, it sits under the personal computing header, if its gaming only it gets mentioned in the dot point. Ie: you can't be sure where the costs are reducing.
Tiago Rodrigues
Member
Even as a 3rd party publisher, after that brutal Gamepass price increase, they still manage all these declines. Holy shit.
Im not even gonna mention that hardware decline . This is a 30% decline after countless others.
Im not even gonna mention that hardware decline . This is a 30% decline after countless others.
Ramiro_Rodriguez
Member
Wasn't he the only one who convinced Nadella to invest in the Xbox division instead to sell it?
We all know that no one would buy the Xbox division and only the IPs and a few studios.
I mean, he still fucked up, but the Xbox division was already 6ft under because of Don Mattrick and the One.
Nydius
Gold Member
True. My only problem with this alternate timeline way of thinking is that I don't think they would have raised the cost of Game Pass Ultimate to $30 if the ABK acquisition had fallen through. At least not this soon.
PauloRoberto
Member
With all due respect, there is a diference between 'let's give up because it's not working' and 'lets try to burn this market first and emerge as the savior and, ops it did not work'.
ChorizoPicozo
Member
Uh... Mmmm guys, can someone explain what is the little line at the left of those numbers and is it good or bad? Thanks